Smith and Walras: Two Theories of Science

Author(s): Dusan Pokorny
Reviewed work(s):
Source: The Canadian Journal of Economics / Revue canadienne d'Economique, Vol. 11, No. 3
(Aug., 1978), pp. 387-403
Published by: Blackwell Publishing on behalf of the Canadian Economics Association
Stable URL: http://www.jstor.org/stable/134313 .
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and subsequentlypublished in this JOURNAL. Smith stresses empirical testing. Any remaining errors and insufficiencesare. of whom Smith is sharply critical. 3 August/aofit 1978. my own. Of the many facets of such an inquiry into the diverse origins of modern economics. In giving the article its present form. As a result of these differences. For further suggestionsand advice. Walras's theory of science is very different from Smith's. presented during the Tenth Annual Meeting of the CanadianEconomics Association in Quebec City. Walras's point of departure is Plato. and from Professor Jaffe himself. no. I am indebtedto my colleagues Samuel Hollander and David Nowlan. Smith et Walras: deux theories de la science. prompted economists to ask anew the old question of what Adam Smith and Leon Walras had in common and where they differed. this article is concerned with only one: the relationship between the theory of science proThe firstdraft of this article was preparedas a part of my comments on William Jaffe's insightful and thought-provokingpaper. Malgre les apparences. although he recognizes that it can never completely free our knowledge of the influence of conventions whose origin is in the mind itself. la theorie de la science de Walras differe considerablement de celle de Smith. A cause de ces diffe6rences. The recent two hundredth anniversary of the Wealth of Nations. coinciding as it did with the centenary of the Elements of Pure Economics. 0008-4085/78/0000-0387 $01. Vincent W. Walras considere la science economique comme un systeme entierement deductif erige sur des postulats qui n'ont pas a etre vrais et compose de propositions qui n'ont pas a etre confirmees par l'observation avant de servir. Walras sees economics as a wholy deductive system whose assumptions need not be true and whose propositions do not have to be confirmed by data before being applied. the kind of statement regarded as a theorem by Walras need not be regarded so by Smith. I draw upon comments from the chairmanof the session.Smithand Walras:two theoriesof science D U S A N P O K O R N Y / University of Toronto Abstract. Printed in Canada/Imprim6 au Canada.la sorte de proposition consideree comme tin theoreme par Walras n'est pas necessairement tenue pour tel par Smith. Ia perspective walrasienne prend ses racines dans Platon que Smith pour sa part critique vertement. XI. of course. Smith met l'accent sur la verification empirique meme s'il reconnalt que la connaissance ne peul jamais se liberer completement de l'influence des conventions qui ont leur origine dans 1'esprit lui-meme.50/!1978 Canadian Economics Association . Bladen. Despite appearances. Canadian Journal of Economics/Revue canadienne d'Economique.

' so that 'there is no break.. so 'the more practised thought of a philosopher . Since the 'connections' are said to be 'events. We consider it. 27-8). The impressionthat Smith leaned towards a realistic epistemological position is supportedby his insistence that 'pressureor resistance [of the objects of touch . For Adam Smith. the Solid Body or Thing.and Newton (190). the gap perceived in the observed 'train of events' is to be filled in by a 'connecting chain of intermediate events' (ibid. or as a thing that subsists by itself. they started from profoundly differing ideas about the nature of scientific inquiry. a theoretical system is 'an imaginary machine invented to connect together in the fancy those different movements and effects which are already in reality performed. will often feel an interval betwixt two objects. seeing a gap.' even if they are not observable. Finally. therefore. Astronomy. Epicurus. the flow of events that was customary and smooth. 41). the 'notion of what has been called impenetrabilityof matter. so to speak.' Thus. what is thus 'the natural course of things' to one mind need not appear so to another. the temptation is great to conclude that in this respect too Walras simply failed to recognize how close he in fact was to Smith (Jaffe 1977.Gassendi. missed something. seem very strictly conjoined. The mind is at rest and feels no need to inquire into what it apprehends. . in its being different from the reality it aspires to depict: it is also 'imaginary' in 1 Ibid. or the absolute impossibilitythat two solid resisting substances should occupy the same place at the same time' is specificallyassociatedwith Leucippus. Just as a musician develops a 'nicer ear' which will allow him to discern a dissonance where others hear only harmony. the supposition is that we have.' they are thought to 'be there. appearances notwithstanding. 50. which. 40). is interrupted. Of course. However. 'This power or quality of resistancewe call Solidity and the thing which possesses it. to 'reveal' them means really to 'construct' them . and independentof any other thing' (187). 185). a perception in which 'the chain of events presented to the senses' appears to 'fall in with the natural career of the imagination.'" Thus. no gap. the 'machine' of theory not only exists 'in the fancy' and is therefore. 44. and that put forward by the French theorist. therefore. because of the latter circumstance. no stop. requires that it be bridged. But how is that to be done? In the first place. to more careless observers. That is. However.. ADAM SMITH In outlining his theory of science. no interval' (Smith. Since both were no doubt inspired by Newton.but in such a manner that they fit. As we feel it as something altogether external to us.DP] necessarily presupposesexternality in the thing which presses or resists' (1795/1967.Democritus. I shall try to show that. as neatly as possible. The point made here is further stressed in the following passage. the events observed. so we necessarily conceive it as something altogether independent of us.388/ Dusan Pokorny pounded by the Scottish philosopher. as what we call a Substance. Smith begins with the notion of conventional perception of objects and their sequences. and the mind. 43.

' (Smith.Smith and Walras: two theories of science /389 the sense that the 'laying open' of the hidden 'intermediate events. at least in principle. But Smith is at pains to stress that 'it was by the sensible qualities . as they at first appearedto the senses' (Astronomy. 64)..which he joins together by it.2 always includes short-cuts. The unobserved has to be expressed in terms of something intelligible and.' necessary for the establishment of the order and coherence which the mind requires. in order to connect together a few. necessarily follow' (107). 497-9). the 'appearances of the Planets' are said to 'remainas loose and incoherentin the fancy. in themselves. repose and tranquility.4 An emphasis on the material criterion of truth is suggested also by Adam Smith's critique of Plato. At the same time. the universalityof gravity. 129). From the context it is clear that what is praised is not simply the internal consistency of the theory but its confirmation by the data at hand. acceptable to common sense. abstract from all their particular and sensible circumstances. 100. Although the 'intermediate events' are not observable. 61. but they must enable the crucial step from empirical familiarity to theoretical universality. that we judged the specific Essence of each object. 110. 125-6). she has . more from the nature of language. and that it decreases as the squares of the distance increase. 126. or rather. of which he was before ignorant. and such as the imagination can more easily attend to. in the ancient Greek philosopher's view. As Smith puts it. independent of the act of understanding. as Adam Smith puts it. smoothness and easy coherence (Astronomy. without any information. 46. and all the appearances. Newton's gravity.'i. but more new. 'universality of gravity. leaps. Metaphysics. merely by asking a number of properly arranged and connected questions about it' (134. 3 Astronomy. philosophy 'never triumphs so much as when. philosophy should 'consider the general Essence of things only and . 98. our minds' attempts to approximate them must be related to some outstanding.' They should be 'familiar' to us. Physics. of course. 130. 4 'Allow [the] principle. perhaps. more contrary to common opinion and expectation. 110-11). more natural indeed. In one of the early systems of astronomy. created anotherconstitutionof things.."3This is the theory which the latter goes on record as considering superior to all those advanced prior to it. than from the nature of 2 Smitlhwrites of 'the natural propensitiesof the imagination'and mentions regularity and orderliness.. gravity (107). any general truth. is the central thesis of Bitterman (1940. inconsiderableobjects. we learn that Newton devised 'a system whose parts are more strictly connected together. 'we never act upon it [upon matter] without having occasion to observe this property.' resulted in 'the fallacious experiment which showed that a person might be lead to discover himself. 71. The view that Adam Smith's methodology was essentially empirical and inductive.than any of those appearancesthemselves' (75-6).. esp. This is the role of Smith's 'connecting principles.. . than those of any other philosophical system' (107). 107. eminent feature of everyday experience. He first reports without demur that. Smith concludes that Plato's doctrine concerning 'Species or Specific Essence of things' is an 'abstract philosophy' which 'seems to have arisen. Finally.' He complains that Plato's postulate of the universals possessing 'an external existence. And if we ask why.e.. and flights of human fantasy. The classical example of such an explanatory principle is.

the weather is rainy. Thus. have become really infinite.in the latter instance.' and to various degrees of 'experience' (225). 'In the beginningsof language. upon this. 8 We can handle only a limited number of individualnames but we have the ability to conceive of classes of objects and to denote them by universals (226-9). is what his words seem to import. Alexander ambullat. or with our initial understanding of the 'goings on' . as it were. than from the natureof things' (Metaphysics.as that of Alexander not walking. and thus he is understood by Aristotle.and the attribute.or matterof fact. as the elements of which they are composed' (242. at least. is more coherent in the expression than in the idea.. and which seems to have arisen. therefore. men found themselves partly compelled by necessity. however.limits inherent in the construction of the human mind .6 In short. we come to realize the limits of this procedure . like many of the other doctrines of abstractPhilosophy.and it is the effect of the imperfectionof our language. prepositionsare substitutedfor suffixes to express relations and adjectives are added . or temnpestasest pluvia. Adam Smith refers to people's 'wants. 1761/1967. However.the idea or conception of Alexanderwalking. we can keep track only of a limited numberof variationsof verbs and nouns.it rains.our 'natural' tendency is to give it a name.the person or the subject. than in the more artificial expressions. suffixesare replaced by personalpronouns. into three parts' (Smith. having 'carved' a unique 'event' out of the totality of our surroundings . 239-40). and to institute words. Similarly.. into two. 130). affirmedof the subject. The division of this event. This. or matter of fact. the want of one. more from the nature of language. into two parts. men seem to have attemptedto express every particular event . there is no inherent reason to expect that procedures founded primarily in human concerns7 and reflecting the limitations of man's mental faculties8 will necessarily direct us to what nature is 'as such. Alexanider walks . the most intelligent and the most renowned of all his disciples. as upon many other occasions. divide the event. let me quote here the passage in full: 'Such was the doctrine of Plato concerningthe Species or Specific Essence of things. But as the number of words must. the rain falls. it is through the intermediation of genuine data that we learn about the organizing principles of the world around us.the simple event. in the case of the former. is as perfectly and completely one simple conception.plavit. pure universals interposed between the sensible object and the mind which conceives it.390/ Dusan Pokorny things. Gradually. into two parts.'to 'necessary occasion. In these two last expressions. by a particularword. or at least to capture the whole of it in a single word. see also 241 and the discussionof Lindgren'sarticle below). which should denote not so much the events. imber decidit. in this case. 7 In connection with the origin and development of language.But in nature.Every body must observe how much more simplicitythere is in the naturalexpression. 6 'The phrases. is artificiallysplit and divided in the one.presumably in accordance with our interests. But Adam Smith is also aware of some of the limitations of the empiricist's appeal to data and experience. and partly conducted by nature. He appears to believe that we perceive an 'event' as a whole and therefore try to encompass it by one word. in the other.and have recourse to the device of imposing upon the 'event' a structure which is 'artificial' in the sense of resulting partly from the properties of our language. supplies. is altogether artificial.'5 Thus there are no separately existing. which could expressat once the whole matter of fact that was meant to be affirmed. in consequence of the really infinite variety of events. to divide every event into what may be called its metaphysicalelements.which.. by a numberof words. or 'metaphysical' in reproducing only partially the 'real' composition of the 'event' concerned. It is a doctrine which. which expressedat once the whole of that event..' 5 For future use.

In accounting for this change. Attention shifts fronma few magnificient irregularities'(comets.' but act 'to stop. he still rejects it: the new hypothesis cannot overcome all the limitations of the preceding conventional wisdom.Smith and Wairas: two theories of science /391 But conventions of language. compose only one species of a genus. on what formal criteria a hypothesis should satisfy and what would constitute its confirmation and falsification . rather than the individual. 86-7). 47-50).how a covenant on these all-important matters is.' Thus.though invisible causes'which do not support'the ordinarycourse of things.The resulting alteration in the human perception of the world is characterizedas follows. The 'natural career of imagination' which determines what we are prepared to accept without wonder or question at a certain point of time is primarily a feature of the social. or represents a tacit agreement among men on what is to be accepted as a 'natural course of things.' The first of these funidamentalchanges is associated with man's progress from the age of savagery to that of early civilizationi. Smith stresses the importance of two factors: the accumulation. time and again. is a response to this consensus. the explanation of 'irregularities'tends to require 'some chain of intermediaryevents' and 'may thus render the whole course of the universe consistent and of a piece. Thus. Another.Smith illustratesthe 'naturalprejudicesof imagination'by the notion of the Earth's'naturalinertness' (a conviction which militated against the acceptance of Copernicus'ssystem) and the belief that perfection of the heavens required the orbits of celestial bodies to be circular (a prejudicewhich delayed the acceptanceof Kepler's ellipses) (77-80. to thwart.and to disturbit. Thus. 9 Having defined philosophy as 'the science of the connecting principles of nature.' The philosopher's revolt against this complacency. there is an intimate connection between the sketch of the world that the 'generalityof mankind'works out in their daily life (in productiveactivities as well as mutual contacts between individuals) and both the generation and the acceptanceof scientific theories.'Their explanationwas originally in terms of 'intelligent. and thus 'embarrassing' to the mind which craves for simplicity (64-77). albeit relatively more narrow. eclipses.while 'chemical philosophy' serves to demonstrate that systems which explain the order of nature in terms of what is familiar only to specialists have 'in all ages crept along in obscurity' (46).) to many. pronouns. replaced by another covenant. Even if he rejects it.' Later. however important. qualities. change in the human perceptionof the universe is the replacementof the Ptolemaic system by that of Copernicus. and the resulting sequence of intermediaryadjustmentswhich made it more and more complex. Of course. the explanationextends also to the 'ordinary course of things' which was earlier seen as merely going on 'of its own accord' (Astronomy. over long periods of time. the progressof systematicknowledgeis clearly seen as a social process which is not limited to the scientific community itself: it depends on the development of over-all patterns of world perceptioncommon to both the layman and the 'artist'or theorist. psyche: it relates to the state of knowledge in general. In this way.or relations (231-5). no matter how influenced by the unique traits of his personality. and even the smallest irregularities. thunder etc. of observational data which rendered Ptolemy's hypothesis less and less tenable. Smith also observes that theories which have succeeded in gaining 'any general credit on the world' are those the 'connectingprinciples'of which appear 'familiar to all mankind'. Dealing with further developments. And this . and adjectives are 'general words'denoting classes of objects.' Smith writes of its 'revolutions'yielding a sequence of 'differentsystems of nature.9 And so it becomes clear that the testing procedures invoked in the to denote qualities. prepositions. when Adam Smith follows the progress of astronomy and other fields of systematic knowledge he is in fact revealing to us how a kind of covenant on what questions to ask and what aspects of reality to select for investigation.

But it does not mean that.392 / Dusan Pokorny empirical conception of truth are themselves dependent upon conventions embodied in the episteme10of the historical period in question. would support his needs for consistency and empirical relevance' (21 ). is 'artificial' or 'metaphysical. the hierarchyof its practices. He uses it as shorthandfor 'epistemological field. What makes a sequence of individual words an utterance. evidence of our senses reveals nothing at all about nature as it really is.' as we find it employed by various scientificdisciplines (Foucault.' 10 This term is borrowed from Michel Foucault.' 'objective states. the hearer's mind constructs the composite.. Unlike Lindgren. its exchanges. seen as a whole. 'natural'or 'real. Smith does contrast the innate wholeness of the event itself with our language's contrived construction of it. its values. As we have seen. 908-9).. to possess only a 'simple structure. the distinction is rendered as follows: (a) 'Objects. the real world does influence the composition of our ideas about it. he is careful to note that. state.. or event is described in an utterance.. In accordance with this structure. the empirical orders with which he will be dealing and within which he will be at home' (xx). For. is their mutual relation: the 'grammatical part' of the utterance. 6). its techniques. 908) Before Lindgren. its 'unity' or structure. In modern terms. at most. employment .' it contains elements or aspects that are.. as we have also seen. from the very first.[which] establish for every man. however.' or 'positive basis of knowledge. This seems to indicate that while our division of the 'simple event' yields a product which. Becker stressed Smith's 'allegiance to empirical method' (13) and appeared to associate the latter's concern for language with the belief that 'the rules of . All this virtually rules out the possibility that Adam Smith accepted the maxims of simple empiricism. mosaic-like image of the event signified. in his view. 11 Lindgren (1969. its schemes of perception.' or 'objective events' are said to be unstructured wholes or. xxi-xxii). of common language .' men are 'partly conducted by nature' (see n. A recent attempt to portray Smith as a pure conventionalist"1misses one point of his argument and misreads another. It is also the 'positiveunconscious of knowledge' (xi) and is explained as 'the pure experience of order and of its modes of being. The discrepancy between the natural wholeness of (a) and the artificial 'complexity' of (b) is then presented as a proof that 'there can be no warrant for even wondering whether the structure of our ideas corresponds to that of the objective states they represent' (Lindgren. But this extreme view does not do justice to Adam Smith's position. 1966/1973. in dividing the 'event' into 'elements. Thus. and to the degree that such influence is present the structure of the 'event' is not a product of language conventions alone.' So much for what I believe to be the part missing from the conventionalist developmentitself is of course influencedby the permeationof specializedor theoretical knowledge into the world-viewof the 'commonman.. 1969.those governing its language.' (b) The object.' an experience which is 'in every culture between the use of what one might call the ordering codes and reflectionsupon order itself' (xxi). or at least approximate what is. . The ordering codes themselves are characterizedas 'the fundamentalcodes of a culture . Becker (1961) noticed some of the peculiarities of Adam Smith's treatnIentof language.

' And Adam Smith himself writes on the preceding page of gravity as an observable property of matter (see n. Adam Smith does not affirmthat the way we organize our image of the world is derivable solely from the properties of our language. the quote is from Smith (Astronomy. the general public is said to make the mistake of conceiving of a 'connecting principle' as a 'fact. as if they were the real chains which Nature makes use to bind togetherher severaloperations. but not in terms of ideas. evidently meaning ideas which relate to something real. at least to some degree. We are given to understand that Smith himself writes that 'the structure of our ideas seems to have arisen more from the nature of language.Can we wonder then. However. by one capital fact [namely.12 Let me quote the two sentences in full: And even we. embraced the epistemological position of a pure conventionalist. it is plain to the naked eye. they may remind us of a passage in which Smith writes of 'the indolent imagination' whose product 'eludes the grasp of the imagination' . than from the nature of things' (Lindgren. in effect. As for the misreading of Smith's text. n. that it should have gained the general and complete approbationof mankind. the discovery of an immense chain of the most importantand sublime truths. 5).' It is in this light that we have to see also the concluding passage of the 'Astronomy. all closely connected together.Smith and Walras: two theories of science /393 argument. and that it should now be considered. have insensibly been drawn in. the universalityof gravity .DP] of the realityof whichwe have daily experience. 1969. 3).' which has been cited to support the claim that Smith. But to draw attention to this kind of error would not be the same thing as maintaining that there is nothing at all to connect"Newton's theory with the way nature actually operates.not as an attempt to connect in the imaginationthe phaenomena of the Heavens. to make use of languageexpressingthe connectingprinciplesof this one [meaning. the familiarity of seeing unsupported things fall to the ground seems to be confounded with the universality of gravity as an explanatory principle. And this censure of Plato makes sense only if Adam Smith himself believed that the human mind is. Thus. 108).DP]. 25). In both these instances. on the contrary he criticizes Plato for putting forward a philosophical system which is coherent in terms of words. 'upon an 12 Lindgrenrefers to this passage (1969.meaning that. 901. . 908).to connect together the otherwise disjointedand discordantphenomenaof nature. but as the greatest discovery that ever was made by man. Of course. while we have been endeavouring to represent all philosophical systems as mere inventions of the imagination. capable of approximating the 'nature of things. we do not know which of his earlier statements Smith wanted to correct and cannot be sure of what precisely he intended to convey by the two sentences quoted. However. a glance at Smith's essay will show that the statement contrasting 'the nature of language' with 'the nature of things' does not refer to 'the structure of our ideas' but to 'the doctrine of Plato concerning the Species or Specific Essence of things' (see n.of the system of Newton .

' But to say so. We can identify progress in scientific knowledge: we can judge some theories to be better than others. it seems that.14 The first are then judged acceptable in the sense of coming closer to. or 13 The passage is a part of Smith's critique of Plato's Specific Essences of things (Metaphysics. For they allow us to distinguish between theories that. eclectic position. 14 This feature of Adam Smith's epistemological views is stressed by Campbell (1971). 219-20). as we know. and always. 'imagination. absolute knowledge. From the point of view of pure empiricism and pure conventionalism alike. in my view. underlie any such test.can never be known by man' (Lindgren. 'The close relationshipthat Smith builds up between theory and observationsbegins with the assertion that it is on account of the wonder and surprise aroused by the visible and tangible world that scientific explanations are sought in the first place' (41-2). this is an inconsistent. rather than Newton. Smith's text. and theories that do not. to pass the test is not to obtain the proof of full. decisive for scientific truth. 'We can say. holding that 'the laws which govern events in the extremental order if indeed there are any . achieve results compatible with the data obtained by observation. there is a view that can be summarized as follows. the important thing is that Adam Smith's emphasis. in his discussion of Newton versus Descartes16 (and indeed in his whole history of science). and necessarily. then. in the last analysis.' the. or rather to feel entitled to think in these terms. 901). products of individual 'fancies' or historically developed conventions. is already to argue that not all imagination is of this kind: that the connecting theoretical chains may be imaginary without being wholly. All in all. Therefore. The meaning of 'better' is determined by two circumstances. 16 Mini (1974) makes Adam Smith an adherentof Descartes. Therefore. may. and includes the development of. that human mind is capable of obtaining some knowledge of the real structure of the world."3 To be sure. the 'nature' of things themselves. underlying a variety of Smith's statements among which we do not find an unambiguous commitment to a clear-cut epistemological position. on confirmation. but others will inevitably. Second. go so far as to substitute 'the nature of language' for 'the nature of things. 1969. More . First.394/ Dusan Pokorny attentive consideration. But such tests are meaningful in that they guide our mind in its efforts to extend the jurisdiction of the familiar to the provinces of the hidden. in doing so. and the second are rejected as departing further from. that when Smith moves from explaining the popular progress of scientific knowledge to an assessment of the reasons which are. conventions whose origin as in the mind itself and of which the mind can never rid itself completely.purious notion 'vanishes' as 'incomprehensible. Empirical tests mnay undermine some of them. taken as a whole. does not support the claim that he was a pure conventionalist. 132).' especially an unattentive one. he stresses the importance of the detailed correspondencebetween the deductive consequences of theories and observationsof the phenomena which they purport to explain' (45). that the historical process of gaining knowledge starts from.'5 In the present context. it is rejected if it does not fit observed data' (41). 'Smith notes that however well a theory satisfies imaginative and therefore aesthetic criteria.. 15 This view is perhapsmost clearly articulatedin Thomson (1965.

geometry. specifically. Cf. but did not apply to them. the philosophy of Des Cartes.. LEON WALRAS Turning to Walras. That this is a critique from Newton's point of view is confirmedby what Mini himself writes about the two thinkers. Though he was not ignorant. he seems to have paid them nio great degr ee of attention.Smith and Walras: two theories of science /395 falsification. which could afford no reason. The task.Smith writes: 'The system of [Des Cartes]. therefore.. 1977.DP. a remark which. Walras became committed to this goal of refashioning social sciences after the miodel of mathematics. Rather.' being 'partly guided by nature. because it differedfrom that of the former. it followed the prescripts of Descartes (88). well-grounded hypotheses from untenable fancies. emphasis mine . however. See also Smith's references to Descartes in Astronomy 42. 85-6. when they were reoardedin the detail. Newton held facts to be supreme. his critique of Plato and his reference to men.. though it connected together the real motions of the heavenly bodies accordingto the system of Copernicus.' other sciences. which Kepler had first discovered in the system. he also criticized the French philosopher's method of inquiry. did so only when they were considered in the gross. therefore. Jaffe.' allows us to conclude that he regarded the human mind as capable of gaining some knowledge of the real world and empirical tests as serving to separate. in dividing 'events' into 'abstract elements. Descartes 4conceived mathematicsas the unquestionedmistress of the mind-matterrelation .which Kepler has ascertained in the movements of the Planets . albeit not absolutely. However. we enter a different world. 105 and in 1755/1967. relieved him from the necessity of applying his system to the observations of Kepler. mathematicsitself is to be modelled ort experience' (Mini. had ne'ver hiimself observed the Heaviens witli any particular application. 17-18). . Newton is no longer beheld with wonder. has become the property of all. he leaves the reader with the impression that Adam Smith accepted Newton's methodology because. 1974. blut coulld no longer satisfy those that wi)ereskilled in Astroniomiiy'(Astronomy. namely. his inclination to engage in abstract speculation and his concomitant disregardfor empirical data. is not so much to explicate his system and present it as the embodiment of a method that is of general validity and to be followed in a general sort of way. 89. of theories by the data at hand. believed to be still labouring under the spell of medieval metaphysics. enshrined in the philosopher's niche: he has been assimilated into conventional wisdom and. 99. therefore. that Smith not only noted that Descartes' system was supersedledby that of Newton. to the point of even dictating the speculative interest of the pure mathematician!That is. as was said before. the stress is on application in a much more literal sense of the word: on allowing an unduly rationalistic interpretation of Newton's concept of inquiry to penetrate.. 28). then. happily. But when the obsercvationas of Cassini had estab- lished the authority of those laws. and the other Astronomers.. he [Des Cartes] contented himself with observing that perfect uniformity could not be expected in their motions .. why such particullarlaws should be observed.more happily than had been done before. or to the extent that. Des Cartes. inight conitinule to anninse the learined in othter sciences. of any of the observations which had been made before his time. from accommodatinghis system to all the minor irregularities. in part. So far. Originally a student of technical sciences. a careful readingof Adam Smith'sphilosophical essays will show that he looked at Descartes through the eyes of Newton and espoused the latter's method. and 'take over. For instance. It seems clear. at least in some less demanding ways.

for instance. Then. 1727). 1965. In astronomy. it is direct proportionality and in the second an inverse one. is that these technical disciplines were to his mind quite different from the humanities.. Letters 1-599 are includedin volume 1.to which political economy belonged.I use a notation which is.provided they are considered in isolation of the next move which Walras makes. In mechanics. however. 'requireonly plain judgment joined to labour and assiduity. for all the heavenly bodies.myc-y . (In order to bring out the structuraldissimilarity. 19 Walras ( 1909). 18 Jaffe (1965).) so the celestial equilibriumstipulatesthat. letters 600-1322 in volume 2. he comparesthe conditions of equilibriumof the exchange of two goods with the conditions of equilibriumof a steelyard. In economics... just as the market equilibriumrequiresthat in any exchange the product of the quantityand the value of one commodity is equal to the product of the quantity and the value of the other commodity (q. cf. of course.. q.. isomorphic . and his references to. and ultimately a 'complete analogy' with. VC . and quantities of commodities (qa. Both theorems are similar to the extent that proportionalitymust obtain.m/3cl3 . like medicine and chemistry. in which he discussed the similarities between the two systems in considerable detail. the basic basic idea is that values (Va. Here.). but ma is also a kind of numeraireused for the purpose of expressing the mass of other celestial bodies (np . 20 Walras (1909) investigatestwo instances of analogy between the two systems. In economics. Newtonian mechanics. This aim would have oeen best served by showing that the two systems are.396/ Dusan Pokorny and mechanics17 almost as soon as he began to be concerned with social studies. equilibriumrequires that prices be directly proportionateto marginal utilities. First. the numerairebody appears. Newton do not seem to have ever gone beyond the basic theme of his economics representing a 'consistent application' of. but this is not true for prices. The point. mf.mP/ma). the equality of the product of mass and acceleration (maca .) to the masses of celestial bodies (mna. letters 1722.. the weights suspended from two arms of the steelyard must be inversely proportionate to the latters' lengths.). qb.Vb/Va). in the first case. 1735. letters 256 (1874) and 81 (1862). at least in their main theorems..Bc = n-ycy -. m-y. Second. . in part. by contrast.. the general market equilibrium equation is structurally identical to that of celestial bodies.) correspondto accelerations (ca.. or discussions of. in the equilibriumcondition at the level of prices. Walras did not achieve it.. This discrepancyshows that the two systems in their final shapes are not just two interpretationsof the same formal system. The two systems are isomorphic . Vb.). as the numeraire acceleration (ca = n. without demanding a great deal of what is called either taste or genius' (1755/1967.. See.20 17 Smith includes astronomy and mathematics among the sciences which. I am grateful to Professor Jaffe for lending me his reprintof the paper.. In the correspondingn-level equilibrium condition in astronomy. quantitiesare measuredin physical units and prices are expressed in terms of the numeraire (pb .. )...the numerairecommodity appears as a quantity(qa = qbpb = qpc =. but the differencebetween direct and inverse proportionalityexcludes structuralidentity in the rigorous sense of the term.'9 That essay tried to give a rigorous formal expression to what he described as a 'striking' or 'perfect' analogy between pure mechanics and pure economics (Jaff6.but if this was the goal. c-y . ca is pictured as playing a role similar to va. Walras compares the conditions of general market equilibriumwith those of the universal equilibriumof heavenly bodies. True.' one of the last papers he was to publish."8This is true even of 'Economics and Mechanics... differentfrom that employed = .va = qbVb= qcvc . and letters 1323-1783 in volume 3. In terms of values and quantities. Then. both the equilibrium in the exchange of two commodities and that of a steelyard are phrased in terms of four variables and invoke the concept of proportionality. 16-17).

and in this rather limited sense is on a par with mechanics or astronomy. believe that Plato endowed universals with a separate real existence. 2-3). . can be found also in Adam Smith's account of Platonic philosophy. In his case. as Walras knew. In his mind. differentfrom those employed by Walrashimself. 1874-7/1954. However. and only one.' without qualifying his approval in any way but also allows this indubitable truth to include an addendum according to which the corporeal entities are 'manifestations' of universals (Walras. however. however. Depending on the interpretation of Plato's theory of Forms. It is to the effect that 'science does not study corporeal entities but universals. 11-13. Most commentators. of the psychic 'forces. as well as considerable variability. the analogy is perfect because in his presentation prices are replaced by quantities of the goods exchanged (1871/1965. or less philosophically. in concluding his article Walras insists that 'economics has the same clainmto being a mathematical science as does mechanics or astronomy' (Walras.' or conditions. it may be possible to rearrangethe elements of the second comparison to bring the two systems closer together. If Walras viewed Newton more narrowly. Walras writes that there exists one. 1909. or we have to look elsewhere for what the words 'the same claim' might have meant for the propounder of pure economics. the message of the piece is not clear. namely. including Aristotle and Adam Smith himself. The Elements of Pure Economics include an item not to be found in the older work. he was more explicit than the author of the Wealth of Nations in defining his epistemological position. But their structures were in fact not altogether identical nor the analogy quite that perfect. On one hand there is the exteriority of mechanical phenomena and the objective measurability as well as relative constancy of the forces operating in this sphere. As a result. and this difference turns out to be substantive. and those of a lever. On the other hand we have the 'intimacy' of economic phenomena and the lack of objective measurability. a passage that.Smith and Walras: two theories of science /397 However. in the first instance the systems compared are. Similarly. the justification of the claim or title being really 'the same' is likely to have been the 'perfect' analogy he believed he had established between the central propositions of the two sciences. than Smith. with minor variations. Either the whole tortuous search for 'analogy' ultimately yielded only the meagre result of establishing that economics uses the language of mathematics. 102-6). This piece begins by what is virtually a quote from Plato.' But this is the only thing the two renderings of the Platonic approach to science have in common. It may be added that. a sketch of the 'general philosophy of science' from which the 'particularphilosophy of political and social economy' is derived. this statement may mean either of the following two things. difference between the two sets of theorems. independent and by Walras). Jevons too had observed the anology between the conditions of equilibrium in the exchange of two goods. Despite these differences. 60-1). and in the second they would be. For Walras not only considers this statement to be 'a truth long ago demonstrated by the Platonic philosophy.

If Walras espoused this interpretation. . supply. the emphasis is on divorcing the concepts themselves more and more from particularities and real-life distinctions. 'specific Essences' being judged by the 'sensible qualities. 22 'The later Platonists. like those of exchange. But the espousal of Plato's concept of science is another matter and cannot be dismissed so lightly. following the procedure employed in the physico-mathematical sciences. If Walras meant what he said . The 'later Platonist' in question is probably Albinos. Thus in an ideal market we have ideal prices which stand in an exact relation to an ideal demand and supply. 126n).who lived at a time when the notion of the separateexistence of specific essences were universally exploded . or plan conceived in his own mind. capital. Now. his reference to corporal entities being manifestations of universals implied an affirmation. now usually describedas a member of the Middle Platonic School. 71). external existence of universals. writing in 1750. it is always conceivable that the reference to 'manifestation' was a slip of pen. market. Even in Walras's subsequent elaboration on the fundamental 'truth long ago demonstrated by the Platonic philosophy.' On the contrary. which was predominant in his time and is still so today. in 1874. lived in the second centuryAD.. If this is what Walras meant.' Moreover. The later Platonists and their followers held that universals were not to be understood as having a separate. 'the pure theory of economics ought to take over from experience certain type concepts. In what is evidently his crucial methodological pronouncement. Walras writes that. income. Albinos.2" and a doctrine which Smith himself emphatically rejected. of the doctrine of separate. productive services and products. Metaphysics.' we find no critique of Plato. there is no mention of the point Adam Smith set such a high store on. a doctrine which Adam Smith..we may tentatively identify two areas in which he radically departs from the methodological principles advocated by Adam Smith. 21 Smith'sphilosophical essays were publishedfor the first time in 1795 but are believed to have been writtenaround 1750.21 thought had been 'universally exploded' by the second century AD. namely. More specifically. demand. he adds that 'the return to reality should not take place until the science is completed and then only with a view to practical applications. representedhis [Plato's] doctrine as meaning no more than that the Deity formed the world after what we would now call an Idea. which abandoned the idea of universals as special existences but retained most of the other features of Plato's conception of knowledge. From these real-type concepts the pure science of economics should then abstract and define ideal-type concepts in terms of which it carries on its reasoning . 1874-7/1954. in the same manner as any other artist' (Smith. who is generally credited with having reinterpretedPlato's theory of Forms in the above sense. external existence in their own right: Forms were said to be only thoughts in a Supreme Divine Mind.and there seems no reason to doubt that he did . he was committing himself to a theologically influenced Platonism...' For such sciences are expressly said to 'go back to experience not to confirm but to apply their conclusions' (Walras.398/ Dusan Pokorny distinct from mind and sensible objects. or a momentary aberration.

they are applied. or more properly to enable them to provide such a revenue or subsistence for themselves.' in the Wealth of Nations (47. such as the discussion of 'that early and rude state of society. we might say that Smith relied to a substantial extent on the semantic conception of truth. having been proved. level. imaginary events and appearances. In Walras. it is through the intermediation of such genuine data that we gain access to the properties of universals. This conception of scientific knowledge apparently does not preclude occasional use of thought-experiments. pure world of model with its own. 64). except for the influence of the conventions inherent in the given episteme. proposes two distinct objects: first.23 he contrasts it with his own perception of pure economics: 23 'Political economy. 1776/1937. In the universe of discourse of pure economics.Smith and Walras: two theories of science /399 First. What is claimed for them is not a separate ontological posture but a special epistemological status. or syntactical. Theories are not confirmed or falsified. and so does the difference. In this way. on the material criterion of the truth or falsity of propositions. 397). But the question is immediately posed whether or not economics really is. the affinity with Plato becomes obvious. The presupposition evidently is that the truth or falsity of theorems is established at the formal. we are confronted with a separate. Thus. But Walras clearly goes much further than that. and secondly. the distinction between 'actual' event and 'imaginary' event becomes. For the immediate object of investigation becomes the intermediate. actual data are replaced by stylized 'data' across the board. to supply the state or commonwealth with a revenue sufficientfor the public services"(Smith. The universals populating the mind-constructed world of an economic model are unlikely to be regarded as having an external existence of their own. or science. Second. are the objects of philosophy. immaterial.' Indeed. one proceeds directly to putting them to a use or purpose. and their logical validity. at least at the level of pure theory. or on precisely what grounds it should be regarded as. Alternatively. Smith's argument about the nature of scientific knowledge is conducted in terms of data whose actuality is unquestioned: the 'connecting principle' is said to join together 'events' and 'appearances.' or 'that original state of things. this concept of truth is absent. Some of Walras's crucial pronouncements bearing on this issue are included in his critique of Adam Smith's concept of economics. a science whose propositions do not require empirical confirmation or are not subject to falsification by the data at hand. or syntactic truth. we are told. a reality whose entities are in themselves non-observable. considered as a branch of the science of a statesmanor legislator. representing already the first step in the explanation of the behaviour of the corresponding. Adam Smith's emphasis on 'connecting' actual phenomena led to a great deal to stress on empirical testing of theories. to provide a plentiful revenue or subsistence for the people. artificial reality of the theorist's own creation. using the language of modern logic. . It is not difficult to see that an ideal market with ideal products and ideal prices is a world of empirically untained universals. observable entities. Having quoted the definition of political economy from the introduction to Book Iv of the Wealth of Nations. which.

economists are working in pure science.. Mechanics and astronomy apply mathematics. as it increases. they are making statementswhich are scientificin the strict sense of the term . the year Walrasdied. my emphasis) This statement may be summarized as follows: First. only implicit.. Adam Smith's theorem concerning the falling rate of profit may be 'something of this sort. And Walras'svoluminous correspondencegives no indicationthat he would have been familiar with the works of Boole. But no deduction can go beyond the confines of this procedure. that is why they are 'scientific in the strict sense of the term. in the postulates themselves. If pure economics is a science which goes back to experience 'not to confirm but to apply' its conclusions. 3/ This trend can be checked or even reversed (cf. and only if. the rate of interestdeclines in a progressiveeconomy . . 25 This is. In making statements such as these. however.25 This is not to say that the results of deductive reasoning are trivial or useless. It is a wholly deductive system in which theorems follow strictly by formal logic from the postulates. It may be worthwhile to make explicit by formulating the theorems what is. 52. 183) by disturbances such as the acquisition of new territory. The theorems of the former are usually understood to require empirical confirmation or to permit falsification. but to pursueand masterpurelyscientific truths. but the ensuing propositions certainly are present already in their assumptions. 336). not all valid formulas are tautologies.' Seconds. the profits of its employment necessarily diminish (Smith. 1776/1937. some further postulatescan be introducedto eliminatethis difficulty. 1973. Adam Smith did something of the sort himself. then geometry is indeed a perfect model for it.. The primaryconcern of the economist is not to provide a plentiful revenue for the people or to supply the State with an adequateincome. given the postulates. geometry is a part of mathematics itself. the reply is that it is so if. 2/ This general principle is applicable also to the stock of capital. The first volume of Principia Mathematicaby Russell and Whitehead was publishedonly in 1910. 1874-7/1954. of course. or Peano. 1/ The market price of things commonly diminishes as their quantity increases. However. true only of sentential logic. or the introduction of new branches of trade (Smith.' Although Walras mentions them in the same breath.for example. the propositions of the latter are subject to the criterion of formal validity. all the fundamentalworks of modern logic were published after the appearanceof the Elements.24 If we ask. In predicate logic. Peirce. when an argument is valid.That is precisely what economistsdo when they assert. astronomy is not quite the same kind of science as geometry. Frege.. then. its premises tautologically imply its conclusions. propositions of pure economics are of the same kind as those of geometry.that . 24 Walras'sargumentis evidently in terms of Euclidean geometry.400 / Dusan Pokorny Thus when the geometer states that an equilateral triangle is at the same time equiangularand when the astronomerstates that the planets move in an elliptical orbit at one of the foci of which is the sun. Are Adam Smith's statements about the behaviour of the rate of profit to be understood as the result of a purely deductive reasoning of the above kind? Let us first summarize his argument. In the system of Euclid himself. With the exception of Boole's books.. Hollander. the theorems do not quite follow from the postulates.. while all tautologies are valid formulas. (Walras.

' Applied to economics. I have in mind his contention that the proposition 'the rate of interest declines in a progressive economy' is of the same kind as the proposition 'an equilateral triangle is at the same time equiangular'.' From this point of view. b/ Today.. were also known to be true. are regarded merely as abstract 'shapes. 406). competition will reduce the rate of profit to the general level (115). accepted in Euclid's time and also in Newton's time. and c summarizethe discussionof the subject in Barker (1967. Then the only proper questions in geometry pertain to the formal deducibility of uninterpreted theorems from uninterpreted axioms.27 a! The traditional position. or whether it is meaningful even to ask whether they are true or false. the establishment of a new manufacture or of a new practice in agriculture may at first increase profits above the level of the other trades. for experience afforded no ground for doubting them. letter 1145. .' c/ An alternative modern view is that 'the various geometries should be regarded as uninterpreted systems in which no meaning has been assigned to the primitive terms and in which.' one of which is recogniz26 'La science enconce des verites que 1'experiencene saura confirmer (r . therefore. we can 'think of Euclidean geometry as saying merely that if the Euclidean postulates hold.' From Walras'snote entitled 'a Pareto' (see Jaff6. The answer to these questions depends partly on the epistemological status of the postulates employed. 1965. n. or in other conceptions of economics. And this is how the theorems. for each merely expresses true assertions about the logical deducibility of theorem from postulates. This view makes any geometry as true as any other. but we may also want to know whether they are true. the disturbing. no question of the truth of postulates or theorems can arise.'26 We know that geometrical theorems are logically valid. 4/ Thus. 'all geometries are equally true. how they could be known to be true. la proportionalite des valeurs aux raretes). to an area which perhaps can be treated in a purely deductive manner in other sciences. b.Smith and Walras: two theories of science /401 1776/1937. c yields the somewhat disconcerting result that the symbols used in our equations. 1969. or in any other formalization of economic discourse. 8). but the post-technological change equilibrium profit rate may still be higher than the pre-technological change rate (Barkai. but is not so treated by Smith. But let us return to the implications for Walras's own concept of economics of his fascination with geometry. even if 1 and 2 were shown to be instances of deductive reasoning from a set of axioms. 27 Points a. the Euclidean theorems hold. or rather.. in the degenerate sense that truth is irrelevant to them all. contraposing forces referred to in 3 and 4 would still belong to the political and technological environment of this system. 93). 286-7). was that the postulates were strictly true. gradually. partly on our understanding of the primitive terms used. or his indication that 'values are proportionate to marginal utilities' is epistemologically on a par with 'the circumference of a circle is equal to the product of its diameter and the number ir. or logical consequences of the postulates. It seems clear that.

He did not see that even the latter approach did not allow him to bypass the question of the truth or falsity of propositions. For Le'on Walras. a priori and synthetic (286). 136). . one can scarcely escape the impression of an epistemological position which is neither very clear nor very consistent. however. 1967. All things considered. a theorem appears to have been anything that followed from a set of assumptions by implication and was applied. Even b turns economics into a study of certain kinds of abstract order. and arbitrage immediate. This shows that the thrust of his methodological argument was in the direction of making economics a wholly deductive system. To me at least it seems doubtful whether the latter proviso is sufficient to make such propositions theorems in Adam Smith's meaning of the word. Nonetheless. it is easy to see what is the core of his thought on the nature and method of economics. Adam Smith or John Stuart Mill. 288) to. unconcerned about either the epistemological status of the assumptions underlying it or the material truth or falsity of the propositions derived from these postulates. his theory relies heavily on assumptions that are even less obvious than those used by his predecessors. so abstract indeed that it really does not matter which set of if-clauses is selected as the basis of the deductive system outlining it. In this case. 28 By now it is generally recognizedthat 'the attemptto spell out literally and in detail the basic postulates of economic theory soon reveals limitations to their obviousness' (Koopmans. and an insistence on regarding economic propositions as geometrical ones. It is difficult to imagine that even Walras himself would have believed that the postulates of his pure economics satisfied these exacting conditions. information perfect as well as costless.402 / Dusan Pokorn'y ably distinct in relation to others but is not given any interpretation. The logical implications of assumptions of this kind can hardly have the stature with which the traditional interpretation of geometry endowed its theorems.except perhaps for the historical link (Barker. a stress on the shift from real-type concepts to ideal concepts. his economics would have to be based on assumptions that are strictly true and absolutely universal. they include such clearly counterfactual postulates as that of an ideal market in the form of a gigantic nationwide auction of consumption goods and production services. Walras failed to realize that making economics an analogue of mechanics was not the same thing as presenting it as epistemologically on a par with geometry. 1957. Of course Walras may be seen as having adhered to the traditional view a. It consists in a combination of a surprisingly rigid adherence to Plato's concept of science. Nor did he apparently perceive that his own theory did not satisfy the standards he might be understood as setting forth for the assumptions on which a deductive system was to be built. Thus. or has no connection whatsoever with economic concepts or terms as they are usually understood.28 After all. with prices cried initially at random. For instance. say. both c and b lead to the conclusion that pure economics has no connection with an inquiry into economic phenomena .

Adam ('Physics') (1795/1967) 'The Principles Which Lead And Direct Philosophical Inquiries: Illustrated By The History Of The Ancient Physics.' Journal of Political Econoimy 48. 897-915 Mini. 185-223 Smith.' Ibid. James F.' Ibid. ed.' Ibid.' Bulletin de la Societe Vaudoise des Sciences Naturelles 45. 212-33 Walras. Tjalling C.. Adam ('Astronomy') (1795/1967) 'The Principles Which Lead And Direct Philosophical Inquiries. (1974) Philosophy and Economics (Gainesville: University Presses of Florida) Smith.M. William (1 977) 'A centenarian on a bicentenarian: Leon Walras's Elements on Adam Smith's Wealth of Nations. Samuel (1973) The Economics of Adam Samith(Toronto: UJniversity of Toronto Press) Jaffe.: Irwin) Walras. gen. Transl. ed. W. Michel (1966/1973) The Order of Things (New York: Random House) Hollander. 19-3 3 Jevons.Ralph Lindgren.' Souithern Economic Journal 28. Illustrated By The History Of The Ancient Logics and Metaphysics. (1971) Adam Smith's Science of Morals (London: Allen and Unwin) Foucault. (1961) 'Adam Smith's theory of social science. (1957) Three Essays on the State of Economic Science (New York: McGraw-Hill) Lindgren.' In Paul Edwards. 166 (Lausanne) .. and the Different Genius of original and compounded Languages.' Journal of Political Economy 77. Kelley) Smith.' Quarterly Journal of Economics 79. The Encyclopedia of Philosophy 3. (1965) 'Adam Smith's philosophy of science. Thomas D.M. Leon (1909) 'Economique et Mecanique.' Ibid. 122-35 Smith.J. William Jaffe.Smith and Walras: two theories of science /403 REFERENCES Barkai. 13--21 Bitterman. ed. 487-520 Campbell. William. (1940) 'Adam Smith's empiricism and the law of nature.' Quarterly Journal of Economics 83. This JOURNAL 10. Herbert F. H. (1965) Co-rrespondence of Lieon Walras and Related Papers (Amsterdam: North Holland) Jaffe. Haim (1969) 'A formal outline of a Smithian growth model. 285-90 (New York: Macmillan) Becker.' In J. Illustrated By The History Of Astronomy. 109-22 Smith. Adam (1776/1937) An Inquiry into the Nature anadthe Causes of the Wealth of Nations. Adam (1795/1967) 'Of The External Senses. Piero V. Ill. 225-51 Smith. (1 967) 'Geometry. Edwin Cannan. J. (New York: Modern Library) Thomson. Adam ('Metaphysics') (1795/1967) 'The Principles Which Lead And Direct Philosophical Inquiries. Stefan F. (Homewood. or the Theory of Social Wealth. Leon (1874-7/ 1954) Elements of Pure Economics. 30-109 Smith. Adam (1761/1967) 'Considerations Concerning The First Formation of Languages. Ed. Ralph (1969) 'Adam Smith's theory of inquiry. 396-414 Barker. Adam (1755/1967) 'A Letter to the Authors of the Edinburgh Review. The Early Writings of Adam Smith 15-28 (New York: A.' Ibid. Stanley (1 871/1965) The Theory of Political Economy (New York: A. Kelley) Koopmans.